OAN’s Brooke Mallory
11:52 AM – Tuesday, October 31, 2023
Following the Supreme Court’s June decision to overturn President Joe Biden’s expansive debt relief proposal for the pandemic era, the Biden administration is now reportedly proposing a new plan to cancel student loans.
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A proposal for student debt relief was unveiled by the Education Department on Monday.
It would target four groups of borrowers: those with federal student loans that have balances greater than the original amount borrowed, those whose loans were repaid more than 25 years ago, those whose loans were for career training programs that resulted in “unreasonable debt loads or provided insufficient earnings,” and those who are eligible for forgiveness under other repayment plans but have not applied for it.
A fifth group of borrowers, those “experiencing financial hardship that the current student loan system does not currently adequately address,” were also being considered in the plans. However, this group of borrowers does not hold a guaranteed spot currently.
“President Biden and I are committed to helping borrowers who’ve been failed by our country’s broken and unaffordable student loan system,” said Education Secretary Miguel Cardona in a statement, including that the aid would build upon $127 billion in loan forgiveness that the Biden administration approved for about 3.6 million borrowers.
“We are fighting to ensure that student debt does not stand in the way of opportunity or prevent borrowers from realizing the benefits of their higher education,” he included.
This month, the White House declared that an extra $9 billion in aid will be provided to around 125,000 Americans.
After the Supreme Court rejected Biden’s expansive pandemic-era debt relief proposal in June, federal student loan payments started up again for the first time in more than three years.
An estimated 43 million borrowers were scheduled to have their college debt forgiven up to $20,000 under the president’s prior plan for student debt relief. Following the Supreme Court’s invalidation of the original plan, Biden announced additional choices for debt repayment.
He claimed that borrowers would be able to participate in a 12-month “onramp repayment program” in order to reduce their chance of default once loan installments started in October. According to Biden, if a student has missed payments during that 12-month period, the Education Department will not report them to credit bureaus.
Furthermore, the current president declared that he would reduce the monthly ceiling on discretionary money allocated to student loans for undergraduate studies from 10% to 5%.
In his first proposal, Biden claimed that he would reduce debt through a 2003 statute known as the Higher Education Relief Opportunities for Students Act, or HEROES Act. According to this statute, in order to lessen the financial burden caused by a national emergency, the government may grant relief for student debts.
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